Press Release

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1st Quarter 1998 Earnings Release

WEST CALDWELL, New Jersey - May 21, 1998 -- The Children's Place Retail Stores, Inc. (Nasdaq: PLCE) today reported record sales and earnings for the first quarter ended May 2, 1998.

Net sales for the 13-week quarter increased 43% to a record $56.0 million, compared with $39.2 million for the same period in 1997.
Comparable store sales increased 7% for the quarter, compared with a 5% increase for the same period last year.
Net earnings were a record $2.7 million, up 171% from $1.0 million a year earlier.
Diluted earnings per share increased 175% to $0.11 per share, compared with $0.04 per share in the 1997 period.
The Company opened 23 new stores during the first quarter, including its first stores in the Atlanta, St. Louis and Kansas City markets.

"Our strong first quarter performance was a result of the continued success of our unique store concept," said Ezra Dabah, Chairman and Chief Executive Officer. "Our sales and gross profit gains were driven by strong customer acceptance of our spring and summer lines across all of our divisions, led by the growth of our newborn department. In addition, the improvement in gross profit is also related to effective sourcing of our merchandise, an integral part of our strategy."

The Children's Place Retail Stores, Inc. is a leading specialty retailer of high quality, value-priced apparel and accessories for children, newborn to age twelve. The Company designs, contracts to manufacture and sells its products under the "The Children's Place" brand name. As of May 2, 1998, the Company operated 178 stores located primarily in regional shopping malls in the eastern half of the United States.

 

THE CHILDREN'S PLACE RETAIL STORES, INC.
CONDENSED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)

13 Weeks Ended:

 
May 2, 1998

 
May 3, 1997

Net Sales $
55,999
  $
39,203
Cost of sales
33,866

 
25,185

Gross profit
22,133
 
14,018
Selling, general, and administrative expenses
14,678
 
9,695
Pre-opening costs
1,110
 
472
Depreciation and amortization
1,663

 
1,233

Operating income
4,682
 
2,618
Interest expense, net
59
 
828
Other expense, net
0

 
101

Income before income taxes
4,623
 
1,689
Provision for income taxes
1,881

 
678

Net income $
2,742
  $
1,011
Net income per share:
 
 
   
 
Basic
$
0.11
 
$
0.05
Diluted
$
0.11
 
$
0.04
Weighted average number of shares outstanding:      
Basic
24,660
 
20,421
Diluted
25,605
 
23,804


THE CHILDREN'S PLACE RETAIL STORES, INC.
CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)


 
May 2, 1998

 
May 3, 1997

Current assets:          
Cash and cash equivalents $
3,570
  $
765
Accounts receivable
2,940
 
1,545
Inventories
17,977
 
14,829
Other current assets
15,915

 
9,392

Total current assets

40,402
 
26,531
Property and equipment, net
35,407
 
23,416
Other assets, net
7,213

 
15,951

Total assets $
83,022

  $
65,898

Current liabilities:

         
Revolving credit facility $
0
  $
0
Accounts payable  
9,186
   
8,165
Accrued expenses and other current liabilities
9,540

 
7,372

Total current liabilities
18,726
 
16,196
Long term debt
0
 
18,970
Other liabilities
2,835

 
2,422

Total liabilities
21,561
 
37,588
Stockholders' equity
61,461

 
28,310

Total liabilities and stockholders' equity $
83,022

  $
65,898